Northrop’s quarterly earnings beat estimates on weapon demand
9:18 am Thursday, April 27th, 2023
(Reuters) – Northrop Grumman Corp beat first-quarter earnings expectations on Thursday, helped by higher sales of weapons amid heightened geopolitical tensions.
Shares of the Virginia-based company were up 1.32% in premarket trading.
Defense contractors have benefited as countries ramped up their military spending since the Russia-Ukraine conflict started last year and on tense U.S.-China relations.
Northrop’s peers Lockheed Martin Corp and General Dynamics Corp also reported upbeat sales for the quarter and are expected to benefit from Pentagon’s plans to spend $858 billion on defense this year.
Northrop’s overall sales rose 6% to $9.30 billion in the reported quarter, beating analysts average estimate of $9.17 billion, according to Refinitiv data.
Sales in its space system segment, which makes satellites and payloads, jumped 17% to $3.35 billion, helped by higher investments toward space exploration projects.
The company’s net income was $842 million. Its profit of $5.50 per share also beat analysts’ estimate of $5.09 per share.
However, Northrop’s aeronautic systems business, its second-biggest by revenue and which houses its new B21 Raider jet program, posted a 23% decline in operating income.
The company, had in January, said it was “reasonably possible” that the business would lose money on making the jets for the U.S. Air Force due to inflation pressures boosting its costs for the fixed-price contract.
The company reaffirmed its annual outlook for sales between $38 billion and $38.40 billion.
(Reporting by Pratyush Thakur in Bengaluru; Editing by Shilpi Majumdar)
